TSMC to announce Intel deal

NEW STRATEGY:： The TSMC contract with Intel to supply chips is the first time the world’s largest chipmaker has outsourced its processor manufacturing to cut costs

STAFF WRITER

Mon, Mar 02, 2009 - Page 12

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, many announce today that it has won Intel Corp’s contract to supply its mobile Internet device (MID) and the Intel Atom processor, a local media report yesterday.

This not only marks the first time that Intel, the world’s largest chipmaker, has outsourced its processor manufacturing, but also is an important contract for the Hsinchu-based TSMC for entering the contract manufacturing market for processors, the Chinese-language Economic Daily News reported yesterday.

Statistics provided by market research firm IC Insights Inc showed that Intel was the world’s largest semiconductor firm last year, while TSMC ranked fifth.

Intel chief executive officer Paul Otellini said last week that the company might outsource manufacturing of its Nand Flash memory chips, and a wire report said on Saturday that TSMC could be in talks with Intel over a new contract to supply Nand Flash.

The wire report, however, also said Anand Chandrasekher, senior vice president and general manager of Intel’s Ultra Mobility Group, had hinted that this press conference would be related to the Atom processor.

No matter whether Intel outsources its Nand Flash or Atom processor manufacturing to TSMC, it will help boost TSMC’s capacity utilization rate, the report said.

TSMC yesterday only confirmed that the press conference would be held today, but declined to reveal further information.

A Central News Agency report said that Intel had outsourced production of its South Bridge chips to TSMC in the past, but turned to self-production in recent years, citing an industry insider.

Since the onset of the global financial crisis late last year, many integrated device manufacturers have been forced to close their plants and outsource to contract manufacturers in a bid to lower costs.

In January, Intel also announced the restructuring of its production department, as well as the closure of five manufacturing facilities in Asia and the US.

From a cost perspective, an industry insider said Intel might outsource its orders to TSMC again, the report said.